Minimum Australian home lot sizes should be drastically reduced from 500sqm to 300sqm to free up housing supply, according to the Housing Industry Association (HIA).
HIA Executive Director Planning and Development Sam Heckel said minimum lot size rules were outdated, making it near-impossible to meet the government’s 1.2 million homes target.
“Governments are setting housing targets with one hand, and shutting down supply with the other,” Mr Heckel said in a statement.
“You cannot meet housing targets while leaving the government’s 1950s planning rules untouched.
“These rules were designed for a completely different time, yet governments continue to protect them even as affordability collapses.”
HIA data shows housing construction remains well below the 240,000 homes a year required to meet national targets, while land prices have surged to record highs.
Up to 80 percent of residential land in many cities was locked into low-density zoning or similar, with minimum lot sizes that effectively prohibit subdivision.
Mr Heckel said smaller lot sizes would deliver more homes quickly, without high-rise developments and major infrastructure spending.
“Concerns about overdevelopment are being used as an excuse for inaction, despite the fact subdivision is already limited by stormwater rules, flooding, demolition costs, heritage protections, and market demand,” he said.
“The market already decides where subdivision works and where it doesn’t. What governments are doing is stopping it everywhere, regardless of context.”
Mr Heckel said the HIA modelling showed reducing minimum lot sizes would cut the cost of land for a new home by more than $200,000 – providing immediate relief for first home buyers and downsizers.
“Minimum lot sizes must go,” Mr Hekel said.
“Continuing to defend them means accepting higher prices, lower supply, and ongoing failure to meet housing targets.”
